After reading some threads in this forum there seems to be disagreement as to the legitimacy of some of these firms. T3 is a good example as some say it is a hype scam and others say they are great traders making thousands of dollars per day with a great training program. So I thought "this should be easy to check" and proceeded to do an edgar search and read their Focus reports. the results are summarized below: 2012 2011 2010 revenue $15,122,514 revenue $16,843,690 revenue $82,100 expenses $10,878,659 expenses $11,750,781 expenses $220,002 net income $4,243,855 net income $5,092,909 net loss -$137,902 note that most of the expenses are classified as trading expense or in other words commissions most likely. not exactly Goldman Sachs type numbers, especially if you consider that they have 300 "traders" or so. so for 2012, about 14 grand per trader. Now maybe we can look further and see if the trading wizards that make up the Managing Member accounted for a large part of this profit. so we see that there are three classes of members : Class A -- which is basically all owned by the Managing Member, i.e. Mark sperling and co. Class B -- which is made up of people chosen to be trading team leaders Class C -- individual Traders here are the P&L allocations for the three classes: 2012 2011 2010 Class A -- $669,940 LOSS Class A-- $998,785 LOSS Class A-- $185,674 LOSS Class B -- $1,902.870 Class B-- $2,711,275 Class B-- $15,601 LOSS Class C -- $3,010,925 Class C-- $3,380,419 Class C-- $63,373 Now maybe "the Natural" has his account outside T3, maybe not, but who ever is running up those losses in the Managing Members account needs to throw in the towel and stop trading immediately. Or maybe just try and sell more subscriptions, books , and training fees in the sister company to cover it.
Class A Losses could be losses taken by traders in excess of their risk deposits. So, it doesn't necessarily mean trading losses by the Class A members but it could mean they messed up on risk management. Can't jump to conclusions on simple numbers like this in a complex business with hundreds of traders.
i agree on both counts. but if class a losses do to class c losses then class c guys made even less, so much for the training. also not sure how they account for the commission markup. i suspect it is flowing to class b and should be substantial seeing that they should be paying less than 10 mills for execution and clearing with anything over 100 million shares per month.even if they are only making 20 mills on the markup and are only trading 100 mill a month that is still 2.5 mill a year. money can be shifted around but in the end it doesn't seem to add up in support of the image they are trying to sell. based on these numbers it is really hard to imagine anyone making any kind of real money trading there. marketing, comish marup, and all the rest looks good though. they probably have a nice P&L at the media division, giving the whole enterprise a good return for them. more power to them i guess. i just dont see them doing well actually trading based on this information.
Anyone with knowledge about the regulations regarding prop firms of this structure as far as posting P&L ? What I mean is can, if they want, post the managing traders (sperls, redler, laz ect) daily P&L? Years ago I believe they did this on a whiteboard in their office. I remember last year they were talking about a "premium VTF" where it would show the traders avg price, and shares. As far as I know this idea hasn't been implemented. Now I can think of 3 reason why not, because in the end it's a way to get even more money from subs. 1. The partners decided they didn't want to share these specifics 2. They couldn't develop or find developers for technology 3. Regulations against it. Any thoughts?
This is one of the featured T3 traders chart via twitter... Comical https://mobile.twitter.com/RobInTheBlack/status/411571242840240128/photo/1?screen_name=RobInTheBlack
how do you know that info's not just from the educational side?I thought t-3 traders trade inside a hedge fund type setup were nothings disclosed publicly. All remember tuco trading who I think had about 100 traders. I think maybe 5-10 traders made money when all the info from the lawsuit was brought public. so the last 5 yrs things have gotten even worse. they have 1 superstar trader(sperling) who attracts a ton of dreamers who think they can be him. now remember every month sperling wakes up he probably has a $200k headstart(profits from the educational side and commish over rides). so just think how relaxed you'd be if you had a free 200k every month to blow before you even had a loss. means you can take a 1000 shots at screaming higher high flyers and catch some huge moves. The facts haven't changed over the past 20 yrs. few day traders can make a living trading
This is where he found the financials. Definitely is the broker dealer trading firm, not the education side. http://www.sec.gov/edgar/searchedgar/companysearch.html Type in T3 Trading.
the financials look pretty weak, but take a look for yourself to form your own opinion. Some other things besides what the OP wrote worth pointing out. - they only have 2 million class A capital in there. the rest of the capital is all the trader deposits (b and c capital) - their rent is 1.2 million a year, and there is a list of other expenses on there inc salary and fees, which look to be over 2 million more dollars yearly. - shows a negative 670,000 loss for the owners in 2012. ugly for a firm which claims to be so awesome and they want you to pay them to teach you how to trade. before i traded there, capital deposit or not, i would be asking some pretty hard questions about why the firm loses so much money, why their traders dont do well (using the OPs assumption of 300 traders, its 50,000 in GROSS pnl per trader per year before any trading costs, ecn fees, sec fees, commissions), and why the class a owners keep a cushion of less than their yearly nut, yet they have taken in 8 million of other peoples money. what this does explain is why their CFO was busted stealing other firms trader information. maybe they need to find a new strategy or cover some of their losses or expenses. http://www.bloomberg.com/article/2013-01-31/agV_TVd8LskM.html